Given the ever-widening scope of U.S. tariffs, with the next round set to take effect on April 2, the risks to the economic outlook through the financial channel are elevated and rising. … READ MORE >
Joseph Brusuelas
U.S. households pull forward spending as PCE inflation remains sticky
Households are preparing for what they believe will be another price shock caused by an increase in the costs of goods through a policy-induced trade shock. … READ MORE >
Market Minute: FX volatility dampening dollar valuation vs. peso and rupee
A Black-Scholes model of one-month at-the-money implied volatility options against the Mexican peso and Indian rupee suggests that investors are expecting a last-minute deal that would lower the impact of the tariffs. … READ MORE >
Market minute: The dollar’s role as a reserve currency does not lead to overvaluation
If policies are adopted to devalue the dollar and end its reserve status, they would only damage American businesses and consumers. … READ MORE >
Market minute: The Dirty 15, or those economies likely to be targeted with selected tariffs
From our point of view, the current global trade framework favors the U.S. for the most part. … READ MORE >
Market minute: Identifying the signal from the noise in consumer spending
Producers and consumers have pulled forward economic activity to avoid potential tariffs, which has skewed hard data and dampened soft sentiment data. … READ MORE >
Market minute: Widening credit spreads denote rising risk from trade policy
Wider spreads are often a harbinger of reduced access to capital, rising unemployment and declining corporate capital expenditures. … READ MORE >
Europe’s way forward in a post-industrial world
Change has come to Europe’s developed economies. The combination of China Shock 2.0 and a reduced American security umbrella is creating the conditions that if seized could move Europe toward a more perfect union. … READ MORE >
Market minute: U.S. financial conditions continue to deteriorate
Financial conditions continue to deteriorate as uncertainty and volatility creep back into the equity, bond and money markets. … READ MORE >
Fed holds rates steady with a stagflation-lite forecast
The Fed’s statement and forecasts draw a picture of a central bank that is on its heels and looking to ascertain the difference between signal and noise amid rising uncertainty as it determines its policy … READ MORE >